Patheon to acquire Roche Carolina facility in Florence

A little over a year ago, Roche Carolina Inc. announced a restructuring as the Switzerland-based pharmaceutical concern sought a buyer for its Florence facility.

Sold.

Pharmaceutical developer and manufacturer Patheon announced Monday it has signed an agreement to take over the 300,000-square-foot facility situated on 1,100 acres along Old Marion Highway.

“Under the terms of the purchase agreement, Patheon will acquire the site for an immaterial sum, plus the cost of associated inventory and spare parts," a press release on Patheon’s website stated . "Patheon has also entered into a multi-year supply arrangement with Roche. Patheon expects the supply agreement to help defray the costs associated with running the site for the next few years while it adds new client work into the facility. Over time, Patheon expects the Florence facility to have a similar financial profile to its other sites in its drug substance segment,”

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Pete Mazzaroni, Roche Carolina’s director of communications, said the deal is expected to be closed “in 30 or so days, plus or minus.” The target date of completion is toward the end of January. The current workforce is approximately 200 people, he said. That number has trended down since a Nov. 12, 2015, announcement from Roche of an impending restructuring that put 270 jobs in limbo. This summer, company officials said the Florence facility would close by 2019 as it sought to divest of that property and three similar sites in Europe. When officials said that in late June, there were 220 people working at the plant.

Mazzaroni said the mood among the workforce is “very positive.”

“The fact is that the goal was to find a reputable buyer to keep the site running and keep as many jobs as possible,” he said. “We look forward to integrating the two companies. Clearly this is good news for the community in keeping the site operational with as many jobs as possible. We were going to ramp down to closure. Obviously those plans have changed as we’ve achieved our primary objective.”

With U.S. headquarters in North Carolina’s Research Triangle Park and European headquarters in Zug, Switzerland, Patheon touts $1.8 billion in revenue for 2015 and employs 8,000 people in 26 locations around the globe.

“As the only end-to-end provider of pharma development and manufacturing services, Patheon is uniquely positioned to integrate this new site into our global network and quickly leverage the capabilities with existing and new clients,” James Mullen, Patheon’s CEO, said in the news release. “The company will benefit from the additional North American API (active pharmaceutical ingredients) capacity and adds a state-of-the-art facility with approximately 200 scientific and manufacturing professionals.”

S.C. Sen. Hugh K. Leatherman Sr., R-Florence said Monday he is “absolutely elated” at the news, calling Patheon “a terrific company,” and speculated that there will be “some capital expenditures out there.”

“And from what I understand, they pay good wages and they’re a good company to work for,” he said. “It’s the best thing that could happen to us.”

Florence County Councilman James Schofield said he feels good about Patheon taking over the Florence facility.

“Obviously they’re interested in keeping it running – in what form I don’t know,” he said. “It’s better news than what we thought we were getting.”

In August 2014, the county council approved a new fee-in-lieu-of-tax agreement for Roche, which was investing $50 million in upgrades to the Florence facility. The arrangement added 10 years to an existing lease. A clawback clause outlines incentive repayment over the next 15 years if the company decided to leave or stop producing. The strengthened clawback clause was put in place at least in part because of Heinz bailing out of a facility that was eventually taken over by Ruiz Foods.

Schofield said Monday that Roche’s clawback clause depends on the language and whether it would be assumed by Patheon “or how much they’re doing.”

“If they’re still making all the investments, my assumption is it would stay,” he said, whereas if the company scaled back investments, the clawback “would have some play.”

While financial terms of the deal were not disclosed, records show Roche’s properties and facility are worth at least $3.6 million, excluding equipment.

PATHEON AT A GLANCE

Established in 1974 as Custom Pharmaceuticals.

Renamed Patheon in 1993.

U.S. headquarters in North Carolina’s Research Triangle Park.

European headquarters in Zug, Switzerland.

CEO: James Mullen.

$1.8 billion in revenue for 2015.

The company employs 8,000 people in 26 locations around the globe.

The publicly traded company has 400-plus clients spanning 70 countries to include all of the 20 largest pharmaceutical companies, eight of the top 10 biotech firms and nine of the top 10 specialty pharma companies.

In addition to pharmaceutical companies, Patheon has clients in biotechnology seeking expertise to bring their drug candidates from pre-clinical stages through clinical trials to commercial production and supply.

Patheon launched 70 products in 2015.

The company has made five successful acquisitions in the past four years.